A Tale of Two Cities, and Two Companies

What Amazon could do for the city where it’s already made its mark.

When I was a young boy growing up in and around Newark, New Jersey, there was one company that stayed when nearly all the others left. Prudential, founded in Newark in 1875 as the Widows and Orphans Friendly Society, remained committed to Newark through all its storied economic and political travails.

It stayed there when my family and many others moved out to the suburbs in the early 1960s. It remained even after the city exploded into riots a few years later. It was there when the factory where my father worked, Victory Optical in Newark’s Ironbound Section, was shuttered, a victim of deindustrialization. It stayed when Newark’s political leaders were indicted and jailed on corruption charges. And it was there still when I went to work as a summer intern for the Newark office of the Department of Housing and Urban Development in the early 1980s, which was housed in the Gateway Towers adjacent to Prudential’s old headquarters building.

But Prudential didn’t just stay in Newark, it actively invested in it. And when the bottom dropped out on the city, it worked to rebuild it. All the way back in the Great Depression, the Prudential invested in affordable housing. In 1976, when Newark was at its nadir, it launched a multi-billion-dollar program to work with public, private, and non-profit partners to promote financial and social mobility for underserved populations, concentrating on housing, health, energy, and jobs.

The relationship went both ways; people I knew in Newark loved Prudential. I heard my relatives and neighbors saying how the company kept high-paying jobs in the city when so many were disappearing. I even got to know an executive who worked there, one of the very few professional people I got to meet as boy growing up in the blue-collar town of North Arlington. He started dating, and later married, the daughter of our next-door neighbors Ernie and Eleanor Fetti. Eleanor worked in Hahne & Co. department store in Newark and would sometimes take the bus into the city with my mother, also named Eleanor, to her job taking ads at the Newark Star-Ledger. For my parents, my aunts and uncles, and their circle of friends, “The Pru,” as they called it, seemed to be the one small ray of hope left for their hometown, which had become the posterchild for urban decay.

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In the late 1990s, when I was spending a sabbatical year at Harvard and MIT, a very plugged-in colleague told me about Amazon, a pioneering “dot.com” where you could buy books on-line. Before Amazon came to be, I had spent hours in the local independent bookstore in New Brunswick, New Jersey where I was an undergraduate at Rutgers, and in the original Barnes & Noble and the legendary Strand in lower Manhattan when I was a graduate student at Columbia, to build my library on urbanism. With Amazon, I could search for the latest books or even find rare, out-of-print volumes with just the click of a mouse.

When I was researching and writing my book on the rise of the creative class of knowledge workers, techies and artists who were headed back to cities and spearheading the urban revival, Amazon seemed the very paragon of a new economy company. Its original headquarters was housed in a repurposed hospital building in downtown Seattle, a place teeming with bike lanes and coffee bars. Later it moved to the city’s South Lake Union District, the epitome of urban corporate cool. 40,000 people work in Amazon’s eight million-plus square feet campus (three times the size of the Empire State Building), which accounts for nearly 20 percent of all the office space in Seattle.

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But now, a couple of decades or so since it was founded, Amazon is looking to move a significant portion of its future operations out of Seattle, one of the most affluent, thriving and beautiful cities on the planet. In anticipation, the company has set up its much-ballyhooed HQ2 competition, in which the hundred or so largest cities in North America are vying with each other to see who can offer Amazon the most in the way of talent, housing, transit, airport access, ready-to-occupy sites, and of course a pile of financial subsidies and tax incentives.

What if instead of trying to extract as much value from the public as possible, Amazon made a substantial financial commitment to improving life in its hometown?

Seattle’s problems of unaffordable housing, severe inequality and mounting congestion, reflective of what I call the “new urban crisis,” are markedly different from the problems of Newark’s old urban crisis, but they are urgent nonetheless. These problems have been accentuated by Amazon’s stratospheric growth, and the company could, and probably should, play a role in solving them, instead of just looking for another, new place to grow. Amazon’s new headquarters may eventually ease some of the pressure on Seattle’s housing market and transportation systems, but it should not absolve the company of its responsibility to invest in a better Seattle.

City leaders across North America are pulling out all the stops to attract HQ2. But once the company makes its selection, it will bring the same kinds of problems facing Seattle to its new home. For all its benefits, HQ2 will be a major shock to any urban economy. Amazon should be prepared to help ameliorate the problems that come with growth. It is essential for the public, and for Amazon, to remember that Seattle and whichever lucky city will host HQ2, are not just platforms for doing business—they are great cities whose unique attributes help facilitate growth and success.

Prudential understood this about Newark—even in an era when many people questioned whether cities had lost their core economic functions and if they should even continue to exist at all.

Earlier this year, Prudential opened a new 20-story tower in the city’s reviving downtown. While the company received tax credits for its new building that critics have complained were farin excess of what was needed to keep Prudential in town, it subsequently helped to revitalize the long-abandoned Hahne & Co. building, where Mrs. Fetti used to work and my family once bought our clothes. The landmark building will house apartments, 25% of which will be affordable, a Whole Foods Market, a bookstore, a destination restaurant, and facilities for my alma mater, Rutgers University. Since 2008, the company has invested $386 million in the city.

Prudential’s decision to stick with its hometown is finally bearing business development fruit, as the city turns a critical corner. It is now home to Audible.com, which was acquired by Amazon. And amazingly enough, it is even seriously talked about as a contender for Amazon’s second headquarters. There are looming and significant questions that remain about whether this growth will adequately serve the majority-African American population that now lives in the city, part of what I have identified as the new urban crisis.

But when it comes to the importance of place and community, there is a lot Amazon can learn from the company that stayed and helped to rebuild its hometown when most everybody else chose to move away.

DISCLOSURE: Richard Florida is on the board of Toronto Global, which is involved in its city’s bid for HQ2. He has also provided advice to Kansas City in their bid, and to other cities more informally.

About the Author

Richard Florida is a co-founder and editor at large of CityLab and a senior editor at The Atlantic. He is a university professor in the University of Toronto’s School of Cities and Rotman School of Management, and a distinguished fellow at New York University’s Schack Institute of Real Estate and visiting fellow at Florida International University.

In southwest Connecticut, the gap between rich and poor is wider than anywhere else in the country. Invisible walls created by local zoning boards and the state government block affordable housing and, by extension, the people who need it.